fixed pset2 5g

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Rushil Umaretiya 2024-02-15 23:53:35 -05:00
parent 1780f6c466
commit 927e45d6d4
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4 changed files with 7 additions and 7 deletions

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@ -622,7 +622,7 @@ For this question, consider the market for gasoline in North Carolina. Suppose t
\item If the government wants to solve this externality problem the 'normal' way, would it involve using a tax or a subsidy? How large would that tax or subsidy need to be? \item If the government wants to solve this externality problem the 'normal' way, would it involve using a tax or a subsidy? How large would that tax or subsidy need to be?
The government would need to use a tax to solve this externality problem. The tax would need to be \$0.30, as the difference between the social optimum price and the private equilibrium price is \$0.30. The government would need to use a tax to solve this externality problem. The tax would need to be \$0.50, as the difference between the social optimum price and the private equilibrium price is \$0.50.
\item What is one alternative way that the government could try to solve this externality problem? Explain in a sentence or two how your alternate solution would cause gasoline suppliers to internalize their externality. \item What is one alternative way that the government could try to solve this externality problem? Explain in a sentence or two how your alternate solution would cause gasoline suppliers to internalize their externality.